Nokia Growth Partners Announces $350M Fund Focused On IoT

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What do you finance if you’re in the network business and need to encourage your customers to upgrade faster to the next generation of cellular tech (aka 5G)? Why the Internet of Things of course…

The Nokia-funded VC firm Nokia Growth Partners has just announced a new $350 million fund focused specifically on IoT — and sponsored exclusively by Nokia.

Announcing the fund at a press briefing today, Nokia CEO Rajeev Suri said: “We are launching a $350 million IoT investment fund through Nokia Growth Partners. Our goal is to help accelerate the broad IoT ecosystem, increase the demand for connectivity and generate returns from investments in compelling opportunities.”

“The fund will invest in promising companies primarily around Connected Enterprise, Consumer Solutions, Connected Car and Digital Health, as well as enabling technologies with a focus on capabilities in big data and analytics,” NGP said in a statement.

Earlier in his presentation Suri talked up the potential for 5G to accelerate not only network traffic but also Nokia’s network business.

5G “must happen fast because important use cases demand it”, he asserted, pointing to examples such as autonomous driving as requiring low latency and robustness, and healthcare needing baked in privacy and security. But of course the imperative of next-gen network tech can be encouraged along if you are also injecting $350 million into helping the development of such use cases.

With such clear business self-interest on show, Suri also emphasized that Nokia’s focus will be on driving new opportunities via IoT in “a collaborative and open way”.

“When it comes to the Internet of Things we have been moving fast testing ideas. New business model. New ways to use connectivity to deliver benefits to people and enterprises of all kinds,” he noted, going on to list various examples of how it has worked with others to foster IoT experiments.

“For example we have worked with KT in Korea on the application of real time analytics and automated action to increase farming productivity. We have conducted a market trial for connected bus terminals in New Zealand. Trying new business models for smart cities that go beyond advertising and that improve the overall transportation experience. We have worked on providing intelligent transportation on the highways of Germany with real-time hazard warnings and other safety information, enabling vehicle to vehicle and other infrastructure communication.”

In terms of where NGP will be investing with this IoT fund there is no specific regional focus — as with its main fund which invests in startups globally.

NGP managing partner Bo Ilsoe told TechCrunch the fund expects to make around one investment per month — so 12 or up to 15 per year.

He confirmed the fund will focus on the same stage investments as NGP does, so at least Series A raised. NGP also looks for startups to be shipping product, have a few million in revenue and which are about to expand internationally. So it’s business as usual for the firm — but this specific chunk of funding is earmarked for IoT startups, with plenty of opportunities at the stack/network level, rather than on hardware/devices themselves, he added. NGP does also do follow on funding.

Also today, Nokia’s Suri revealed the company has made an acquisition in the network security space, buying Canadian identity access management software company Nakina. He said they expect this transaction to close in Q1.